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Walmart’s Secret Weapon against Amazon – Convenience Stores

Walmart (NYSE: WMT) has unveiled its secret weapon in the war against Amazon (NASDAQ: AMZN) – a next generation convenience store.

Walmart Pickup and Fuel combines gas pumps, traditional convenience store amenities like snacks, ice and drinks and a pickup area for stuff ordered online, Business Insiderreported. The emphasis will be on groceries but almost anything ordered through Walmart.com can be picked up at the stores.

Customers can even order groceries before 1 p.m. and pick them up at 5 p.m. That means a busy soccer mom can order her groceries on her computer at the office and pick them up on the way home. The groceries will be pulled and packed at a nearby Supercenter.

Beating Amazon to the Punch

The idea is to beat Amazon; which is experimenting with its own grocery pickup location in Seattle, to the punch. So far two Pickup and Fuel locations are open, one in the Denver suburb of Thornton, Colorado, and another in Huntsville, Alabama.

Walmart is also trying to head off Kroger which has been experimenting with its own online order pickup called Click List. Kroger like Walmart is a major operator of gas stations in the United States. The grocer currently operates 785 convenience stores and 1,397 supermarket fuel centers in the USA.

The Pickup and Fuel locations might also serve as collection points for same day delivery services. It is no coincidence that Walmart is also experimenting with same-day delivery service from Lyft in Denver near the Thornton Pickup and Fuel. The company is experimenting with another service from Uber in Phoenix.

Both Walmart and Kroger have major advantages over Amazon in this latest round of the grocery wars. The two companies are major pharmacy operators so they can offer pickup of prescriptions or prescription delivery.

An Opportunity For Uber Eats

An even bigger advantage is food cooked in stores. Kroger is now cooking a wide variety of food in its stores and even operating Asian cafes, taquerias and pizzerias in some locations. If it can add pickup of hot food or delivery through Uber Eats, Kroger would have a major edge in the grocery wars.

Adding groceries to Uber Eats would make a lot of sense and give that company some much needed revenue. News reports indicate that Uber is not making enough money to cover the cost of its operations.

It looks as if simple brick and mortar convenience stores might be the future of ecommerce. This bodes well for convenience store operators like 7-Eleven and drugstore companies like Walgreens (NASDAQ: WBA) with their thousands of convenient locations.

Expect to see massive investments in convenience stores and filling stations from a wide variety of retailers including Amazon. Perhaps Amazon should consider buying 7-Eleven; or entering into an alliance with it or Walgreens, rather than building its own stores.